The "Venetian Tuscany", a little corner of paradise
in the Padania Plain

BUYING PROPERTY IN ITALY

Italy is one of the safest countries in which to buy a house thanks
to its legal system, requiring strict procedures for property transfer.
However, foreign buyers can encounter difficulties in understanding
these procedures. For this reason, the team at Properties in Italy
will provide you all the necessary assistance to thoroughly understand
all of these procedures before taking the decision to buy a property
in our country.

INTRODUCTION

Buying a property in Italy is usually arranged in three stages:

The first stage consists of searching, visiting and selecting
the property with the assistance of an agent (Mediatore or
Agente immobiliare). Once the property is selected, the buyer
may be asked to sign a buying proposal (Proposta d'acquisto),
and leave a small deposit with the agent.

The second stage. If the buying proposal is accepted by the
vendor, the next step is to sign and exchange the contract (contratto
preliminare or compromesso). This is normally a legally binding
agreement to complete the purchase by a public sales act drawn
up by a notary and to pay the balance of the agreed price on a
future specified date. The preliminary sales agreement (compromesso)
is a private agreement between the buyer and seller, where the
"promising" buyer and the "promising" seller commit themselves
in transferring a property. This agreement can be drawn up by
the vendor, agent or a solicitor/lawyer. Since it is a complex
legal document, it should always be submitted for advice to, or
drawn up by a specialized Italian lawyer.

The third stage consists of the completion formalities. The
sale will be completed by a public notary when the final deed
(rogito) or conveyance of transfer is signed. The notary
issues a certified copy of the deed of sale and registers the
original document with the land registry, which makes the buyer
the legal owner of the property. The notary checks that the title
deeds are in order, that the property is legally registered and
that it has no illegal buildings. In Italy only a notary is entitled
to validly transfer title to property. The notary drafts the Purchase
Deed (rogito), ensures its proper execution, registration,
and payment of all Italian taxes connected with the completion.

The notary usually charges about 1.0% of the declared sales price
(depending on the purchase price).

Solicitors and estate agents

In view of the legal and practical difficulties involved in buying
a property in Italy, it is highly advisable for foreign buyers to
obtain the assistance of a specialized Italian lawyer, preferably
one who can speak fluent English, to act on their behalf. He will
be in charge of drawing up contracts, contacting the Notary and
giving all necessary legal advice.

Purchase taxes

Registry taxes (stamp duties) for buying a property in Italy are
usually between 3-10% of the declared purchase price:
3% for residents (only for their main and first residence)
10% for non-residents (or for second houses)
18% for agricultural property

In case you buy a residential property from a private person, the
registry taxes will be calculated on the "cadastral value" (tax
value in the Land registry which is usually much lower than the
market value).
If the property is bought from a construction company ( new developments
or properties restored by the company) you will pay VAT instead
of registry taxes. VAT is 4% for residents, 10% for non-residents
and is applied to the property value declared in the public Deed
of Transfer.

First time buyer benefits

To take advantage of the first time buyer benefits (lower purchase
taxes for residents, see above), you need to declare in the conveyance
deed that you will establish residence (or the headquarters of your
business activity), within 18 months from the date of purchase,
in the municipal territory where the property is located. You should
not own other residential properties in the same municipality or
any other property bought with the first time home buyer benefits
throughout the entire Italian territory.

Property Taxes

Non Residents owning a property in Italy have to pay the following
taxes:

Income tax (IRPEF). Non-residents must submit a tax return
stating the details of their Italian property. If they let the
property, they should declare the yearly rent, otherwise they
should only declare the cadastral rental (usually quite low).

The local community tax (ICI) which is between 0.4% -
0.7% of a property's cadastral value (official value in the Land
Registry), to be paid in two yearly installments. The tax is not
due on property where residents establish their residence.

Restoration or construction

In order to proceed with the restoration or the construction
of a building, it is necessary to obtain the services of a licensed
surveyor (Geometra), or an Architect. All major construction
or restoration works require the presentation of a request for authorization
to the local commune, signed by the owner of the property and a
licensed technician. In the case of light restoration works (internal
walls, painting, floors, window and door frames etc.) it is sufficient
to present a particular request called a DIA (dichiarazione di
inizio attivitą), signed by a technician.

Mortgages

It is currently reasonably cheap to get a loan from Italian banks
which lend amounts against purchase prices of up to 80 %, depending
on your monthly income.

If you need any other information about the above subjects, please
feel free to contact us.